Hong Kong has launched a HK$30bn (US$3.8bn) fund alongside a package of measures to attract international businesses back to the city after strict coronavirus controls and a security crackdown crippled its status as a global financial hub.
Chief executive John Lee on Wednesday introduced visa and tax concessions for skilled foreign and mainland Chinese workers in his first policy address, including a move to make it cheaper for long-term expatriates to buy houses.
Lee is seeking to reverse the effects of government policies that sparked an exodus of residents, reducing the workforce by at least 140,000 in a city of 7.5mn. As security secretary, Lee oversaw a crackdown that wiped out dozens of civil society groups and filled the city’s jails with those charged after pro-democracy protests in 2019.
“The government will proactively trawl the world for talent,” Lee said. “We have to present the true picture of Hong Kong to the world and promote our strengths.”
His address disappointed markets, however, by failing to reveal any further softening of the city’s Covid-19 rules, which prohibit tourists from visiting bars and restaurants during their first three days in the city and prevent quarantine-free travel to the mainland. The benchmark Hang Seng index fell almost 2.4 per cent.
Lee said the city’s international trade offices overseas would be charged with encouraging Hong Kongers who had left the city to return, a pitch that could prove controversial as some government critics abroad have been prosecuted in their absence.
Expats who purchase a residential property in Hong Kong and then stay in the city long enough to become permanent residents, which is possible for some migrants after seven years, can gain a refund on extra stamp duty paid on their first home.
The government will also introduce a two-year “top talent” pass allowing those with an annual salary of more than HK$2.5mn or those who have graduated from the world’s top 100 universities to work in the city without a previous job offer.
Lee said a fund would also be set up to encourage strategic enterprises to relocate to Hong Kong. Businesses focused on healthtech, artificial intelligence, data science, fintech and advanced manufacturing would be prioritised, he said.
Lee also announced a handful of measures intended to bolster activity on Hong Kong’s stock market, where the number of new listings has slowed to a trickle this year, in part due to a regulatory crackdown on Chinese tech groups.
He said exchange operator Hong Kong Exchanges and Clearing would revise listing rules for its main board to facilitate equity fundraising by advanced tech companies as well as revitalise its moribund Growth Enterprise Market in order to cater to the needs of small businesses and start-ups.
Hong Kong will also exempt some market makers from a stamp duty levied on transactions in the city.
However, local brokers were sceptical the measures would have a lasting impact on market liquidity or the flow of new listings, pointing to the 30 per cent fall in third-quarter profits reported on Wednesday by HKEX amid sluggish trading activity.
“Will these measures work? And if they do, ask yourself — for how long?” said Louis Tse, managing director at Hong Kong-based Wealthy Securities. “In two years’ time, you may end up in the same position you started in.”